Effective Reference Checking: A Definitive ‘Why’ and ‘How-To’ Guide 

November 18, 2022 – In an era of increasing artificial intelligence, automation. and digitization, the importance of traditional reference checking as a risk management mechanism cannot be understated. A recent report from NGS Global’s Steve Lavelle, Mark Lelliott, and Fernando Zavala looks at why it is so fundamental to hiring success, and provides helpful tips for ensuring that your process is robust. “Undertaking a thorough and diligent reference checking process for candidates is just as important as the interviews with those candidates,” the report said. “This is particularly the case for executive and senior-level hires.”

A mixture of art and science, a forensic and rigorous examination of a candidate’s strengths and weaknesses is a vital risk management process: not just for the organization undertaking the hire (and the executive search or recruiting firm working with that organization), but for the candidate as well, according the NGS Global report. This is an element that is often overlooked.

“Unfortunately, the current reference checking environment is both complex and challenging for organizations,” the NGS Global report said. “Speed is absolutely crucial to not missing out on an exceptional candidate. Within this context, some organizations are increasingly seeing the reference checking component of the hiring process as a simple ‘box-ticking’ exercise, not allowing the stage to influence the actual decision of whether to move to an offer, and leaning very heavily on the interview process as their one and only benchmark of how to proceed.”

Additionally, the NGS Global report notes that third party services that provide online reference checks increasingly feature as part of the hiring process. These are particularly useful in a limited capacity for appointments which have a reputational, security, or compliance risk associated with them, but they should be seen as an addition to your process and never be a substitute for a more complete and traditional reference check.

Steve Lavelle is the managing partner of NGS Global U.K., based in its London office. He is an experienced European executive search professional, with a track record of more than 25 years recruiting VP, CxO and director level roles, mostly in the technology sector. His work has supported the early stage growth of many hundreds of venture capital backed businesses, private equity funded companies and major corporations quoted on NASDAQ, NYSE, LSE, and other public markets globally.

“A 100 percent online standardized questionnaire assessing the performance of a particular candidate is largely worthless,” the NGS Global report said. “A conversation with a referee provides insights and nuances that complete a much more detailed picture of a candidate, and allow you to unpack certain aspects of their responses in real-time, contextualized to the concerns of the specific role and the broader organizational fit.”

Suggested Tips 

Having worked with thousands of clients to source and place executive-level candidates, these are NGS Global’s key suggested recommendations for effective reference checking:

When to do a Reference Check 

The NGS Global report says that you should conduct a reference check either when a single strong candidate emerges from the shortlist, or when there is a “short” shortlist of two or three potential hires. With the current market need for speed, introduce referee checking as soon as practically possible. It can work in parallel to other stages, such as the final interview/presentation or even occasionally in tandem with a verbal/written offer (which should always be “subject to references”).

Mark Lelliott is managing partner at NGS Global based in Melbourne, Australia. He co-founded NGS Global’s predecessor firm in Australia, EWK International in 2006. Mr. Lelliott has over 20 years of executive leadership advisory and assessment, team development, and search experience across a wide range of enterprises. Over the past decade, he has focused on the development and application of a leadership and management assessment approach, for both executive search and internal executive and team development.

Who to Approach

“Along with candidate-generated referees, it’s a good idea to source one or two others that you would also like to approach,” the NGS Global report said. “Do not source referees from the candidate’s current company. Due to privacy and legal reasons, it is essential that you share who you would like to approach with the candidate, and get direct consent from them before doing so.” The report notes that there are three main sources that will collectively paint a comprehensive picture of the candidate:

• Former managers that the candidate reported to.
• Peers, particularly if they are senior individuals who are part of a firm’s management structure.
• Those that directly reported to the candidate.

Related: Retaining Your Employees During the Great Resignation

Assessment Methodology

Being highly targeted and structured in what you ask referees will speed up the process and avoid paralysis by analysis, according to the NGS Global report. It will also provide a clearer picture as you move to a decision point. The report points out three main areas of assessment:

• Capability
• Values
• Fit with culture.

When NGS Global undertakes this process, they benchmark each of these three main criteria against the expectations of the client we are working for. The degree to which a candidate has the right capabilities, values, and fit with culture can vary dramatically, depending on the industry, role, reporting lines, organization, and personality profiles and expectations of the leadership group.

 Fernando de Zavala is a partner based in the Barcelona office of NGS Global. Mr. Zavala brings a truly global background of experience with over 11 years of experience in the Americas, 12 years in Europe and seven years in the Asia Pacific region. His career has been focused mainly on the human resources industry. He speaks fluent Spanish and English, and is also proficient in Portuguese.

Key Questions to Ask

“As per the above, there should be no standard questions that fit all reference checking processes, and all lines of enquiry should be contextualized to fit the particular paradigm of the organization’s hiring need,” the NGS Global report said. However, as a starting point, the firm says the most incisive questions tend to be:

• Please confirm the nature and type of work you and the candidate have completed together. Over how long a period of time was this?
• Overall, what do you see as the candidate’s major strengths in relation to this role?
• We would appreciate your input regarding a project where the candidate had to engage with conflicting agendas and how the candidate navigated/resolved the situation?
• From your observations, to what extent does this candidate have the influencing and relationship management building skills required for a role such as this?
• How would you describe the candidate’s leadership style in relation to this role and their ability to bring their team with them?
• Overall, what do you see as any particular areas for development, or situations that might challenge this candidate in this role?
• Are there areas that we have not asked you about, that we should have?

Additional Due Diligence – Social Media

One other area that NGS Global suggests researching is how the candidate appears on social networking sites. Social media profiles show months and years of information that can often provide additional intel of a potential hire’s personal traits, values, and professionalism. “This is increasingly used by companies as part of their hiring decision, although some care has to go into ensuring that the profiles of the person you are reviewing online belong to the actual candidate you are considering,” the NGS Global report said. “Even more importantly, be aware that in some regions of the world, particularly those that operate under GDPR law, you need to inform candidates if you plan to review their social media profiles as part of your screening process, even if these profiles are publicly available. To be compliant under this legislation, companies need to explicitly disclose with a candidate which of their social media profiles they will be looking at, how they will be doing so and why.”

Negative Feedback

Sometimes a potentially show-stopping item emerges. NGS Global’s recommendation here is to take this very seriously but not as an automatic “no hire” trigger. It could be due to a personality clash or a bit of professional score-settling. Is there a way to verify the referee’s perspective? Or to address the same point with other referees for their insight? While every situation of this type is unique in terms of content, confidentiality etc., NGS Global considers it best practice normally to give the candidate a “right of reply” by putting the concern to him/her, along with the opportunity for his/her input that feeds into a balanced “hire/no hire” decision.

Speed vs Quality

“Finally and as previously mentioned, a difficult balancing act exists in the current climate (and more generally, with exceptional candidates who are actively looking and are considering more than one offer) in terms of the speed of the search vs. the quality of the search,” the NGS Global report said. “In essence, we would argue that every reference checking process has to have some elements of both speed and quality, and how much there is of each is contextually dependent on circumstances (e.g. how good the candidate/s is/are, the difficulty of filling the role, etc.)”

Related: Hiring Top Talent in Unprecedented Times

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media